is yet in a state of development. Having occasion to refer to this subject, a distinguished judge said: "Formerly but few private corporations were created, and these cut so small a comparative figure in the destinies of States, that they attracted but little attention on the part of law-makers, and were but little studied by the courts. Even in England, until a very recent period, both public and private corporations were created by royal prerogative, without the intervention of parliament, and were invested with such powers and privileges as favorites might ask, or the public good be supposed to require. But even then such corporations were rare. Now they have become among the greatest means of State and national prosperity. It is probably true that more corporations were created by the legislature of Illinois, at its last session, than existed in the whole civilized world at the commencement of the present century.' 991 This state of things has necessarily led to a more careful study of the whole subject, both by legislators and the courts. Not only are commercial or business corporations being thus multiplied, but public and municipal corporations, in all of the States and Territories of the United States, are constantly created and universally adopted as part of the ordinary machinery of government, so that it is perhaps impossible to find a town or city of any considerable size not incorporated and invested with the power of local government.

six; in Birmingham, Liverpool, and most of the large English towns, of sixty-four; in Dublin, of sixty; in Belfast, of forty; and in the other incorporated towns of the United Kingdom it varies from twelve to sixty-four, according to their size. So far as these bodies have authority to pass by-laws at all, their authority is complete, and nobody obtrudes a veto. They appoint and remove all officials. They have entire charge of municipal administration, distributing the work of departmental management and supervision to standing committees of their own number, which they organize and constitute as they please. If such a local government cannot be trusted, the fault is with popular institutions. It is quite certain to be as good a government as the people concerned deserve to have. The location of responsibility is perfectly definite. When the Glasgow city improvement scheme became unpopular with the voters because it was proving more expensive than its projectors had promised, the chairman of the committee was retired by his constituents at the end of his term. The

taxpayers hold every member of council responsible for his votes. The system is as simple, logical, and effective as the American system is complicated and incompatible with harmonious and responsible administration. City government in America defeats its own ends by its 'checks and balances,' its partitions of duty and responsibility, and its grand opportunities for the game of hide-and-seek. Infinitely superior is the English system, by which the people give the entire management of their affairs to a big committee of their own number, which they renew from time to time."

As respects large cities, the general trend of opinion in this country at this time (1911) seems strongly for the moment to be for many purposes in favor of boards or commissions specially constituted. Post, chap. iv.; ante, chap. i. § 26.

Per Caton, J., St. Louis A. & C. R. Co. v. Dalby, 19 Ill. 353. See also similar observations of Rogers, J., in Bushell v. Insurance Co., 15 Serg. & Rawle (Pa.), 176, 177.

There are in this country many hundreds of incorporated places acting under special charters granted by the States or general incorporation acts passed by them.

§ 57 (38). Congress may create. The power of Congress to create or authorize the creation of corporations, public or private, whenever these become an appropriate means of exercising any of the constitutional powers of the general government, or of facilitating its lawful operations in the States or Territories, must be taken to be conclusively settled by the Supreme Court.1 This power has been exercised on important occasions, such as incorporating the banks of the United States, the national banks, and the various Pacific railroad companies; and, within the above limitations, it is no longer disputed. Congress habitually passes acts for the organization of Territorial governments, the local legislatures of which may, under congressional authority, create corporations, public and private, in the Territories; but it is not within the power of Congress to establish municipal corporations within the limits of the States, and it has never attempted to exercise it.

A provision in a Territorial Organic Act, that the power of the territorial legislature "shall extend to all rightful subjects of legislation," authorizes the legislature to create municipal corporations, and to invest them with the power to make ordinances, and to provide corporation courts in which to enforce them. And such courts may be provided, although by the Organic Act it is declared that the judicial power of the Territory shall be vested in a supreme court, district courts, probate courts, and justices of the peace.2

McCulloch v. Maryland, 4 Wheat. (U. S.) 316; Osborn v. Bank of U. S., 9 Wheat. (U. S.) 738; Thompson v. Pacific Railroad, 9 Wall. (U. S.) 579; Pacific Railroad v. Lincoln Co., 1 Dillon C. C. 314; Morawetz on Corp. (2d ed.) $9.

2 State v. Young, 3 Kan. 445; People v. Butte, 4 Mont. 174; Burnes v. Atchison, 2 Kan. 454; s. P. Reddick v. Amelia, 1 Mo. 5. In this case the objection made was, that such a legislature was not sovereign, and that nothing short of sovereign power could create a corporation. The answer given was, that Congress could give, and had given, the power to legislate on such subjects. That a Territorial legislature, vested with general legislative powers, may create a corporation which is not affected by the

subsequent adoption of a State Constitution was held in Vincennes University v. Indiana, 14 How. 268. See also Vance v. Bank, 1 Blackf. (Ind.) 80; Myers v. Manhattan Bank, 20 Ohio, 283. Under the Territorial Organic Act of Colorado, the legislative assembly has power to establish a municipal corporation, but the question of such establishment by special or general law is not discussed. Deitz v. City of Central, 1 Colo. 323. Under the same Organic Act it was decided that the legislative assembly had no power to confer upon a justice of the peace a denomination not warranted by the Organic Act; and, in so far as a municipal charter undertook to confer upon a justice of the peace exercising jurisdiction under the ordinances of the city the name of "police magistrate," it is void. Ib.

§ 58. Local Polity controls Municipal Law. - Within the boundaries of several States, it may be laid down, as a general rule, that it is exclusively a question of local polity with each State what form of government shall be adopted for the different parts thereof. Municipal affairs are inherently local in their origin; municipal corporations are dependent for their existence upon the exercise of the legislative power of the State, and are governed thereby. Municipal law, therefore, is usually a matter which is to be determined and controlled by the local polity of the State as disclosed by its statute law and the decisions of its courts, and in questions affecting municipal government and the rights, powers, and obligations of municipal corporations it may be stated, as a general rule, that the interpretation of the law, as found in the decisions of the courts of the State, is controlling, and the Federal courts, in the absence of some action which affects rights guaranteed by the Federal Constitution and laws of the United States, will follow the rule of law laid down by the courts of the respective States. Whether territory shall be governed for local purposes by a county, a city, or a township organization is one of the most usual and ordinary subjects of State legislation, and does not usually raise any question of such a nature as to permit a person affected thereby to invoke the jurisdiction of the Federal courts by reason of the intrinsic nature of the question involved. It is also a question for the State to determine not only the nature and character, but the number and size of its municipal corporations and their territorial extent. These are matters of a local nature, in which the nation, as a whole, is not interested, and in which, by the very nature of things, the determination of the State authorities should be accepted as authoritative and controlling. It is also a question exclusively for the State to determine what shall be the extent and character of the powers, which the various political and municipal organizations shall possess. In applying the exercise of these powers, the decisions

3

Kelly v. Pittsburg, 104 U. S. 78, 81; Forsyth v. Hammond, 166 U. S. 506, 518; McCain v. Des Moines, 174 U. S. 168, aff'g 84 Fed. Rep. 726. In Kelly v. Pittsburg, 104 U. S. 78, the Supreme Court of the United States held that a State has power to determine what portions of territory shall, for local purposes, be within the limits of a city and subject to its government, and to prescribe the rate of taxation at which such portion shall be assessed; and the annexation of a tract of land to a city, in the exercise of the legislative discretion of the State, does not

afford any basis for the claim that the rights of the owner, as protected and guaranteed by the Federal Constitution, are violated thereby.

2 Forsyth v. Hammond, 166 U. S. 506, 518.

3 Claiborne County v. Brooks, 111 U. S. 400, 410. See also Norton v. Shelby County, 118 U. S. 425, 440. The question whether the performance of the statutory duty of a city to keep in repair a sidewalk in a public street, is a duty to the public, and not to private individuals, the mere neglect of which is a non-feasance only, for

of the courts of the State in so far as they relate to the validity of the incorporation, to the determination of the territory within the corporate limits, and to the existence or non-existence of municipal powers, are controlling, and will generally be followed by the courts of the United States. In exercising this exclusive power over its political subdivisions and municipalities, the people of the State are untrammelled by any provisions of the Federal Constitution. Thus, it may be true that the general rule is that the determination of the territorial boundaries of a municipal corporation is purely a legislative function, but there is nothing in the Federal Constitution to prevent the people of the State from giving, if they see fit, either by the Constitution of the State, or by statute in the absence of constitutional restriction on the legislature, full jurisdiction over such matters to the courts and taking it entirely away from the legislature. The preservation of legislative control in such matters is not one of the essential elements of a republican form of government which, under the Federal Constitution, the United States are bound to guarantee to every State in the Union. But these principles must not be so construed and applied as to hold that in the creation or change of municipal boundaries there may not be action taken by the State which involves a trespass upon rights secured by the Federal Constitution, or that in proceedings looking to incorporation or to a change in the municipal boundaries, or that in the exercise of powers conferred on municipalities, no questions can arise which are of a Federal nature, and in respect to which the judgment of the courts of the nation must be controlling. They only mean that the matter of the creation of a municipality, its territorial boundaries, and the existence or non-existence of powers of government, are local in their nature, and, as a rule, to be finally and absolutely determined by

which no private action for damages arises, is purely local in its significance and extent, and is governed by the law of the State as determined and applied by the courts thereof. Hence, the Supreme Court of the United States will follow the ruling of the courts of the State that the neglect of such duty does not confer a cause of action for injuries sustained by reason thereof, though the decisions of the State court are not in harmony with the general opinion and are contrary to the views of the Federal court. Detroit v. Osborne, 135 U. S. 492, cited and explained in Baltimore & O. R. Co. v. Baugh, 149 U. S. 368, 374. The right of a taxpayer to recover back a tax

paid by him on the ground that it was illegally and erroneously levied on his property, is governed by the local law as construed by the courts of the State. Williams v. Weaver, 100 U. S. 547; Tyler v. Cass County, 142 U. S. 288; Stutsman County v. Wallace, 142 U. S. 293.

Forsyth v. Hammond, 166 U. S. 506, 519; Kelly v. Pittsburg, 104 U. S. 78, 81; Claiborne County v. Brooks, 111 U. S. 400, 410.

2 Forsyth v. Hammond, 166 U. S. 506, 519. As to the delegation to the judiciary of legislative and executive power in municipal affairs, see post, 62.

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the authorities of the State; and when a question arises between the municipality and a third party of a commercial or contractual nature, the Federal courts, in the absence of an authoritative determination by the courts of the State as to the rights and powers of the municipality in respect thereto rendered prior to the transaction before the court, are at liberty to determine such questions according to what it deems to be the principles of the general or common law, for, as has been said, as all or nearly all the States of the Union are subdivided into political districts, similar to those of the country from which our laws and institutions are in great part derived, having the same general purposes and powers of local government and administration, the Federal courts feel authorized, in the absence of local State statutes, or decisions to the contrary, to interpret their general powers in accordance with the analogy furnished by their common prototypes, varied and modified, of course, by the changed conditions and circumstances which arise from our peculiar form of government, our social state, and physical surroundings.2

§ 59 (39). Outline of Ordinary Municipal Charter. - In this country, until comparatively a recent period, municipal corporations have been created singly, each with its special or separate charter passed by the legislature of the State. These charters, in all of the States, were framed after the same general model; but in the extent of the special powers conferred, and in the peculiar constitution of the governing body, and the like, there was great variety. It will be useful to notice the outline features of one of these charters, since it constitutes the organic act of the corporation, and bestows upon it its legal character. Such a charter usually sets out with an incorporating clause declaring "that the inhabitants of the town of [naming it], or city of [naming it], are hereby constituted a body politic and corporate by the name of the 'town of,' or 'city of, and by that name shall have perpetual succession, may

Forsyth v. Hammond, 166 U. S. 506, 518.

2 Claiborne County v. Brooks, 111 U. S. 400, 411, per Bradley, J. The attitude of the Federal courts in this respect is well exemplified in its decisions in regard to the validity or invalidity of municipal bonds. When the powers of a municipality with respect to an issue thereof have, prior to the making of the issue in question, been adjudged by the State courts, the Federal courts follow these decisions and determine the validity or invalidity of

the issue in conformity therewith. If, however, there has been no adjudication by the State courts on these matters prior to the making of the issue, the Federal courts consider themselves at liberty and bound to determine the validity or invalidity of the bonds upon their own views of the general principles of jurisprudence, although after the issue has been made the courts of the State may have passed upon the same questions and adopted a contrary conclusion. See post, chapter on Municipal Bonds.